Question

14) ABC Inc. has the following information: Td A 1D ar the Selling Price per unit Variable Cost per unit $200 $81.50 $102,000 $63,900 Monthly Fixed Production Cost Monthly Fixed SG&A (a) Compute ABC Inc.'s Contribution Margin Per Unit. (b) Compute ABC Inc.'s Break-Even Point. (c) How many units must ABC Inc. sell if it wants to achieve a profit of $40,000?

Answer 1

14 a) Contribution Margin per Unit $ 118.50 Selling Price per Unit Less : Variable Cost per Unit Contribution Margin per Unit 200.00 (81.50) 118.50 Break - Even Point 14 b) 1400 Units Break - Even Point in Units = Total Fixed Cost/ Contrbution Margin per Unit $ 165,900 Total Fixed Costs $102000 $63900 $ Contribution Margin per Unit 118.50 Break - Even Point in Units $165900 / $ 118.50 1400 Units

14 c No. of Units to sell to achive a profit of $ 40000 1738 units Profits to be achived Total Fixed Cost Total Contribution to be achived $ 40,000 165,900 205,900 =Total Contribution to be achived / Contribution Margin per Unit =$ 205900 $118.50 1738 units (rounded off to nearest unit ) No. of Units to Sell 1737.55